Competitive auction

The “competitive auction” procedure is used to determine prices on the stock exchanges: A price (rate) is determined from the orders on hand, which achieves the highest possible turnover and, ideally, a market clearing. All successful bidders receive a single price.
Order book transparency (open order book makes the buy and sell orders visible) allows the structure of the orders to be recognized and promotes the reduction of information asymmetries (information advantage that one bidder has over others, for example). Ultimately, the process of approximating the bids of the bidders can lead to the formation of a market price embodying all information, which increases the likelihood of an efficient capital allocation (directing capital in place of its most productive use).

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